Neiman Marcus 2009 Annual Report Download - page 74

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premium applicable to Mr. Tansky plus (C) if such termination is not a change of control resignation, an amount equal to three times
the sum of (i) base salary and (ii) 85% of base salary in effect on the termination date, or if such termination is a change of control
resignation, an amount equal to two times the sum of (i) base salary and (ii) 85% of base salary in effect on the termination date;
provided, however, that Mr. Tansky shall be required to repay this payment if he violates certain of the restrictive covenants or if he is
found to have engaged in certain acts of wrongdoing, all as further described in the agreement. In certain circumstances, Mr. Tansky
will also be entitled to some or all of the benefits under the Cash Incentive Plan.
If Mr. Tansky's employment terminates before the end of the term due to death or inability to perform (as defined in the
employment agreement), we will pay him or his estate, as applicable, 85% of base salary multiplied by a fraction, the numerator of
which is the number of days during the fiscal year up to the termination date and the denominator of which is 365.
Pursuant to the agreement and depending on the circumstances of the termination of Mr. Tansky's employment, he may also
be entitled to receive an amount equal to the monthly COBRA premium applicable at his termination date based upon the coverage in
effect under the group medical plan immediately prior to his termination date multiplied by thirty-six (36).
Also pursuant to the agreement, depending on the circumstances of the termination of Mr. Tansky's employment, he may be
entitled to up to three years of continuing coverage under our life insurance plan at the same benefit level as provided to him
immediately prior to his termination date and at the same cost as is generally provided to similarly situated active employees of the
Company.
Mr. Tansky's agreement provides that he is entitled to participate in any extraordinary dividend on certain of his options, if
then outstanding, that were granted prior to the acquisition and assumed by Parent.
Mr. Tansky's agreement also contains a tax gross-up provision whereby if, in the event of a change in control following the
existence of a public market for the Company's stock, he incurs any excise tax by reason of his receipt of any payment that constitutes
an excess parachute payment as defined in Section 280G of the Internal Revenue Code of 1986, as amended (the "Code"), he will
receive a gross-up payment in an amount that would place him in the same after-tax position that he would have been in if no excise
tax had applied. However, under certain conditions, rather than receive a gross-up payment, the payments payable to him will be
reduced so that no excise tax is imposed.
Pursuant to the agreement, Mr. Tansky received a grant to purchase 7,269.3851 Fixed Price Options and 9,079.79470
Accreting Options. On April 1, 2010 the Accreting Options were exchanged for 5,668 new Accreting Options that vest 25% on
December 15, 2010 with the remaining portion becoming exercisable in thirty-six equal monthly installments over the thirty-six
months following December 15, 2010. The Fixed Price Options became fully vested on October 6, 2009. The agreement provides for
the accelerated vesting of the Accreting Options upon (i) a change of control or (ii) the termination of Mr. Tansky's employment
before the end of the term due to death or inability to perform. In addition, in the event that we terminate Mr. Tansky's employment
without cause or if he resigns for good reason, the agreement provides that the options will vest as to (i) the number of shares that
would have become vested on the next anniversary of the grant date, plus (ii) if the termination date occurs prior to the third
anniversary of the grant date, the number of shares that would have vested on the next anniversary of the grant date, multiplied by a
fraction, the numerator of which is the number of days from the preceding anniversary of the grant date and the denominator of which
is 365.
Mr. Tansky's agreement also contains obligations on his part regarding non-competition and non-solicitation of employees
during employment following the termination of his employment for any reason, confidential information and non-disparagement of
the Company and its business. The non-competition agreement generally prohibits Mr. Tansky during his employment and for a
period of three years from termination from becoming a director, officer, employee or consultant for any competing business that
owns or operates a luxury specialty retail store located in the geographic areas of the Company's operations. The agreement also
requires that he disclose and assign to the Company any trademarks or inventions developed by him which relate to his employment
by the Company or to the Company's business.
Director Services Agreement with Mr. Tansky
In connection with his new position as non-executive Chairman of the Board that will become effective on October 6, 2010,
the Company has entered into a director services agreement with Mr. Tansky, which is for a term running from October 6, 2010
through December 31, 2011. In consideration of the time, effort, and attention Mr. Tansky has agreed to commit to the Company in
this new role, the Company will compensate Mr. Tansky for his attendance at Board meetings at the rate of $37,500 per Board
meeting for up to four Board meetings in any 12-month period. In addition, upon termination of his employment agreement upon his
retirement and provided such termination does not give rise to an obligation for the Company to pay severance compensation under
the employment agreement, the Company will
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